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Friday, 11 March 2016

Protecting yourself when sending money through a remittance company

This one’s for anyone who
deals with suppliers overseas – whether for your business, material sourcing,
or even as simple as getting cheap raw materials on a regular basis.

I have a few friends who have
started their own businesses selling products, and out of curiosity, I once
asked them how they managed to keep their operating costs low while coping with
the large manufacturing volumes. Their answers didn’t surprise me on bit – most
of them look to overseas suppliers who offer cheaper rates than their Singapore
counterparts.

However, given the extra
charges for overseas bank transfers or credit card payments, it doesn’t quite
make sense to pay through such means especially if you’re buying from overseas
on a regular basis. My friends who rely on China manufacturers to produce their
goods constantly complain of how the payments can be quite a headache, due to
forex exchange rates and timings of transfers. When it comes to stocking up on
our organic ingredients from the U.S., I nearly get a heart attack each time
the final bill comes because it is almost
always substantially more than what I budgeted for.

I’ve been there and I know
how tiring It can be to constantly check your invoices just to make sure you’re
not being overcharged by your bank, or credit card company, for such overseas
remittances.

So when I came to know about
CYS Global and their remittance services, I immediately sent their contact to
my enterpreneur friends who might find it useful. Although the brand isn’t a
familiar household name, they’re actually a Singaporean company which has been
around for over 30 years and ranked among the top remittance companies here.

With so many remittance scams
and victims in Singapore, I sourced around for tips on how to protect ourselves
while dealing with remittance companies, and here’s what I came up with:

1.
Check if they’re licensed by MAS.

There are many fraudsters who
prey on folks here who need to transfer money overseas, but are yet physically
unable to do so. Just last year, an illegal remittance business operating in
Dunlop Street, which collected money from Indian nationals working in Singapore
who wanted to remit to their families in India, was officially busted by the
police. Last December, CNA reported that over 200 people in Singapore had lost
more than $3 million in an alleged remittance scam where victims were offered a
higher exchange rate to transfer money to China.

To avoid becoming a victim of
such remittance scams, make sure you only entrust your money in the hands of a
legitimate company recognized by MAS.

2. Try to only use agents who have a track record of transferring
large funds.

Call me “kiasu”, but I’m
always wary of working with remittance agencies who only serve retail customers
i.e. individual workers, such as Filippino domestic helpers or Bangladeshi
construction workers. Individuals have little power in influencing remittance
agencies – they need the agencies more than the other way round – so even if
there are little red flags here and there, individual customers are more likely
to tolerate it (or at the worst, change to another remittance agent).

However, the same can’t be
said of remittance companies who serve businesses and corporations, because
they could potentially risk being sued if they mess up or try to cheat on the
rates in any way. Thus, another way to make sure you’re well protected is to
work with a reputable remittance company which is already used by businesses
and corporations to transfer money to their overseas suppliers. Also, most
decent companies tend to conduct due diligence on the third parties they work
with, especially on agents who are handling finances on their behalf, so
problematic remittance companies will certainly face difficulty getting such
businesses than good ones.

Such a scale of money
transfers will therefore mean the funds they handle are huge. I reckon such
agents will thus be less inclined to cheat you since your money is nothing
compared to the big boys, and they’ve got a reputation to protect as well.

3. Work with agents who have secure technology systems
to reduce chances of your money being lost.

There are remittance agents
who still rely on manual processes to make money transfers. For instance, the
remittance agents who were sentenced last December had made use of a “Hawala”
system – an informal channel where they would collect remittance funds in Singapore
dollars from Indian nationals who came from the same town or village in India,
and subsequently transmit the money to India by arranging for their
representatives there to disburse the eqivalent amount in rupees to intended
recipients.

If a remittance company
doesn’t even have money to invest in proper technology and security measures,
then I certainly wouldn’t want to hand my money over to them either!

It might also be worth asking
your remittance agent what their policy is for funds that are lost or
misplaced, just in case. Reputable agents should offer to pay you back (since
there’s barely any chance of it happening anyway).

Thankfully, CYS Global has a
bespoke remittance software platform as well as a forex feed from Thomson
Reuters that monitors real-time exchange rates.

4. Look out for those with a wide network overseas.

When I was working with CFOs
(chief financial officers) of large corporations previously, one important
similarity I realized they all had in common was their preference to transfer
money between their local branches through the SWIFT network, which essentially
provides a standardized and secure environment for most financial institutions
to communicate in. If you’ve ever dealt with payments abroad, you should have
come across the term “bank’s SWIFT code” – that’s the same thing.

When it comes to remitting
money, you want to make sure your agent has a strong network of licensed
remittance agents and banks so that your funds can reach within the shortest
time possible. With better agents, your funds can even reach within the same
day.

Even so, there’s no escaping
less-than-ideal currency exchange rates whenever you’re transferring money
overseas, so it is important to work with a remittance agent who will give you
the best value for your money. However, other than exchange rates, you should
also look out for include commissions and transfer fees (usually charged by
banks).

Many companies may claim to
have “no charges or commissions”, but could give you a significantly worse
exchange rate. In the same vein, there are also companies who give good
exchange rates but yet charge higher commissions so they can earn there.

A good question to ask is
“how much (international currency) will I get for my (local currency) after
deductions of all fees and charges?” Use this to compare between remittance
agents instead and go with the one with the best value.

Since 1981, CYS Global has
been serving SMEs and large corporations, handling more than 50,000transactions yearly and funds
in excess of S$2 billion dollars. They specialize in business, corporate
remittance, currency exchange, FX forwards and hedging.

I did a quick comparison of
the rates and they indeed seemed to be generally lower than most of the major
banks.

However, what really sets
them apart is the personalized level of service they provide, where customers
no longer need to deal with frustrating telephone menus. Instead, a dedicated
dealer will be assigned to each customer and can even communicate via email,
Whatsapp, or other means. Just make a simple phone call and your dealer will
inquire about your remittance needs so that he can offer advice on how you can
save the most on your transaction. By combining professional services with
technology to ensure ultimate security and real-time data, this has helped them
to come out tops among many other remittance companies in Singapore.

They have a RemitRewards program, which
rewards members as they earn points for every remittance made.If you or your business has frequently been
purchasing from overseas suppliers or third parties, CYS Global could be an
option as they offer greater cost savings, personalized service and rewards, on
top of everything else!

This is a sponsored post by CYS Global.
All opinions and tips are of my own.

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You can call me Dawn, and this little space on the Internet is where I write about becoming financially-free. Join me as we learn more about savings, budgeting, paying off debts, insurance and investing together!

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Please note that all statements published on this blog are solely opinions of my own i.e. of a personal nature, and should not in any way be taken as statements of fact. Readers are encouraged to do their own research before arriving at any conclusions based solely on materials provided, or republished, on this blog.